Partner Communications Company Ltd. PESTEL & Environment Analysis

Strategic Management Essays, Term Papers & Presentations

Partner Communications Company Ltd. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Partner Communications Company Ltd..

Changes in the macro-environment factors can have a direct impact on not only the Partner Communications Company Ltd. but also can impact other players in the Wireless Communications. The macro-environment factors can impact the
Porter Five Forces
that shape strategy and competitive landscape. They can impact individual firm’s competitive advantage or overall profitability levels of the Technology industry.

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PESTEL analysis provides great detail about operating challenges Partner Communications Company Ltd. will face in prevalent macro environment other than competitive forces. For example an Industry may be highly profitable with a strong growth trajectory but it won't be any good for Partner Communications Company Ltd. if it is situated in unstable political environment.

Spanish oil giant Repsol had to face a similar instance. It started an above average profitability operations in Argentina and made strong returns in 5-7 years. But the business was later expropriated by the Left Wing government. So the decade long profits didn’t materialize in the end.

Political Factors that Impact Partner Communications Company Ltd.

Political factors play a significant role in determining the factors that can impact Partner Communications Company Ltd.'s long term profitability in a certain country or market. Partner Communications Company Ltd. is operating in Wireless Communications in more than dozen countries and expose itself to different types of political environment and political system risks. The achieve success in such a dynamic Wireless Communications industry across various countries is to diversify the systematic risks of political environment. Partner Communications Company Ltd. can closely analyze the following factors before entering or investing in a certain market-

Political stability and importance of Wireless Communications sector in the country's economy.

Bureaucracy and interference in Wireless Communications industry by government.

Legal framework for contract enforcement

Intellectual property protection

Trade regulations & tariffs related to Technology

Favored trading partners

Anti-trust laws related to Wireless Communications

Pricing regulations – Are there any pricing regulatory mechanism for Technology

Taxation - tax rates and incentives

Wage legislation - minimum wage and overtime

Work week regulations in Wireless Communications

Mandatory employee benefits

Industrial safety regulations in the Technology sector.

Product labeling and other requirements in Wireless Communications

Economic Factors that Impact Partner Communications Company Ltd.

The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign exchange rate and economic cycle determine the aggregate demand and aggregate investment in an economy. While micro environment factors such as competition norms impact the competitive advantage of the firm. Partner Communications Company Ltd. can use country’s economic factor such as growth rate, inflation & industry’s economic indicators such as Wireless Communications industry growth rate, consumer spending etc to forecast the growth trajectory of not only --sectoryname-- sector but also that of the organization. Economic factors that Partner Communications Company Ltd. should consider while conducting PESTEL analysis are -

Type of economic system in countries of operation – what type of economic system there is and how stable it is.

Government intervention in the free market and related Technology

Exchange rates & stability of host country currency.

Efficiency of financial markets – Does Partner Communications Company Ltd. needs to raise capital in local market?

Infrastructure quality in Wireless Communications industry

Comparative advantages of host country and Technology sector in the particular country.

Skill level of workforce in Wireless Communications industry.

Education level in the economy

Labor costs and productivity in the economy

Business cycle stage (e.g. prosperity, recession, recovery)

Economic growth rate

Discretionary income

Unemployment rate

Inflation rate

Interest rates

Social Factors that Impact Partner Communications Company Ltd.

Society’s culture and way of doing things impact the culture of an organization in an environment. Shared beliefs and attitudes of the population play a great role in how marketers at Partner Communications Company Ltd. will understand the customers of a given market and how they design the marketing message for Wireless Communications industry consumers. Social factors that leadership of Partner Communications Company Ltd. should analyze for PESTEL analysis are -

Demographics and skill level of the population

Class structure, hierarchy and power structure in the society.

Education level as well as education standard in the Partner Communications Company Ltd. ’s industry

Culture (gender roles, social conventions etc.)

Entrepreneurial spirit and broader nature of the society. Some societies encourage entrepreneurship while some don’t.

Attitudes (health, environmental consciousness, etc.)

Leisure interests

Technological Factors that Impact Partner Communications Company Ltd.

Technology is fast disrupting various industries across the board. Transportation industry is a good case to illustrate this point. Over the last 5 years the industry has been transforming really fast, not even giving chance to the established players to cope with the changes. Taxi industry is now dominated by players like Uber and Lyft. Car industry is fast moving toward automation led by technology firm such as Google & manufacturing is disrupted by Tesla, which has stated an electronic car revolution.

A firm should not only do technological analysis of the industry but also the speed at which technology disrupts that industry. Slow speed will give more time while fast speed of technological disruption may give a firm little time to cope and be profitable. Technology analysis involves understanding the following impacts -

Environmental Factors that Impact Partner Communications Company Ltd.

Different markets have different norms or environmental standards which can impact the profitability of an organization in those markets. Even within a country often states can have different environmental laws and liability laws. For example in United States – Texas and Florida have different liability clauses in case of mishaps or environmental disaster. Similarly a lot of European countries give healthy tax breaks to companies that operate in the renewable sector.

Before entering new markets or starting a new business in existing market the firm should carefully evaluate the environmental standards that are required to operate in those markets. Some of the environmental factors that a firm should consider beforehand are -

Weather

Climate change

Laws regulating environment pollution

Air and water pollution regulations in Wireless Communications industry

Recycling

Waste management in Technology sector

Attitudes toward “green” or ecological products

Endangered species

Attitudes toward and support for renewable energy

Legal Factors that Impact Partner Communications Company Ltd.

In number of countries, the legal framework and institutions are not robust enough to protect the intellectual property rights of an organization. A firm should carefully evaluate before entering such markets as it can lead to theft of organization’s secret sauce thus the overall competitive edge. Some of the legal factors that Partner Communications Company Ltd. leadership should consider while entering a new market are -

Anti-trust law in Wireless Communications industry and overall in the country.